Competitive market analysis is an evaluation tool used to determine the unique attributes possessed by a company’s products and discover the best way to strategically place and market them. This competitive landscape analysis also allows companies to evaluate their competitors and to place them in strategic groups, based on the ways in which they compete for clients.
Competitive analysis is usually performed when new products are entering the market, or when existing companies are trying to differentiate their products from their competitors. A strong competitive analysis can allow companies to identify the similarities and differences between their offerings and those of their competitors, which can ultimately allow them to devise strategies to out-perform them. This is also referred to as competitive intelligence.
The Basics of Competitive Analysis
A well-performed competitive analysis should provide information regarding the similarities and differences between your product and the existing products in the market.
The following key areas can be assessed by competitive product analysis:
- SWOT Analysis - Strengths, weaknesses, opportunities, and threats Positioning and Product Research - Competitors positioning, messaging, product,
- Positioning and Product Research - Competitors positioning, messaging, product, pricing, and packaging
- Competitors’ Marketing Campaigns - Strategies applied by competitors and the results these strategies have yielded
- Assessment of Reviews and Social Interactions - Discussion threads and reviews of competitors’ products, as well as their content and social media
What Is Competitive Intelligence
and How Does It Relate to Product Launches?
Competitive intelligence is the resultant information from a competitive analysis, which should be comprised of information regarding the industry, business environment, competitors, and their service or product portfolio.
Key Benefits of Competitive Analysis for a Successful Product Launch
A product or service involves a significant investment in terms of cost, time, and effort. So, it's obvious to have an anticipated ROI, even before planning a product and its launch. Here are some of the broad pointers to the numerous benefits that competitive analysis adds to the product launch strategy:
- It allows companies to spot market trends and gain insight into the development of products and services.
- Gain insight into competitor strategies, and what has been successful for them.
- Understand strengths, weaknesses, and opportunities in the market.
- It allows businesses to determine and manage any risks associated with product launches.
- It provides an opportunity to study the market from different perspectives.
When to Conduct a Competitive Analysis
Competitive analysis can be beneficial during each stage of a product launch, and all pre-launch, launch and post-launch activities can be enhanced by utilizing competitive intelligence.
- Pre-launchBefore a product is launched, a competitive analysis can provide a clear understanding of the market and problems the product will solve for consumers. User feedback can help to gauge market readiness and how well the product is estimated to perform. If competitors have similar products, user feedback and reviews can be compared.
- LaunchDuring the product launch, competitive intelligence can be used to enrich sales materials and benefit the sales and marketing teams. Using competitive analysis, a business can gain insight into whether the new product is effectively infiltrating the market.
- Post-launchAfter the launch of the product, a competitive analysis can be used to measure the impact of the launch, including how the new product performed. Review sites, online discussions, social media mentions, and industry experts are all good places to listen for feedback.
How to Do Competitive Analysis
Once a company has determined the need for competitive analysis, the next step would be to understand exactly how to conduct this analysis. The following sections explain the various sets of data that you will require and how these will aid you in conducting your analysis.
Evaluate Current Market Dynamics and Take Decisions Based on Data
The key to competitive analysis is understanding the market and devising a strategy to have an edge over the existing leaders within the market after that. This can be done by obtaining the following information:
How many similar products exist, and what are they?
Evaluate the existing market and determine the following to have a clear roadmap for the product lifecycle:
- Competitors’ products: What is the complete range of the competitor’s products?
- Pricing strategy: Do they use a low-cost or high-cost pricing strategy?
- Purchase strategy: Do they use a volume or once-off purchase strategy?
- Market share: What is their current market share?
- Target market: Who is their target market, and how are they appealing to them?
- Marketing strategy: What strategies does the competition use to differentiate themselves in the market?
Who are the competitors, and what is their selling point?
Determine who the real competition is. Competitors are divided into two categories:
- Direct competitors: Competitors that offer a product that is so similar that it could be considered a substitute.
- Indirect competitors: Competitors that offer a product that is not similar but could address the same customer need.
Once competitors have been categorized, ensure that the focus is solely on your direct competitors. Their product offers a similar value, which could pose a threat, rather than the indirect competitor’s product.
What are the current gaps in the market and the timing of the launch?
- Gaps in the market: Gather information on the market as it currently stands and determine which areas of the market are currently unexplored.
- Timing: The launch of the new product should be scheduled based on the market research conducted and tailored specifically to the needs of the target market.
- Product: The actual product that is being launched should also be considered and launched based on its characteristics, and when its purchase and usage is most likely to occur.
Existing marketing features that can be incorporated
Examine how the competitors currently market their products. Look out for the following:
- Product, pricing, and packaging
- Messaging and positioning
- Online and offline advertising campaigns
Based on the target audience, what are the ideal marketing mediums, strategies, and platforms
- Marketing platforms: Understand how your target market consumes their information on a daily basis and utilize these platforms to market your product to them.
- Competitor strategies: Look at what has and has not worked for your competitors' marketing strategies and find ways to differentiate and improve on the existing strategies.
- Mediums: Analyze the marketing mediums utilized by competitors, such as digital content, brochures, print ads, signage, packaging, etc. to see what has and has not worked for them.
How to Measure and Tweak Product Marketing Post Launch
Once you have launched your product based on the data collected from the competitive analysis, you can devise some key performance indices (KPI’s) to evaluate the success of the strategies that you have applied.
Some Important Metrics to Track
- Revenue inflow: One of the most critical KPIs to measure is revenue, as this is the clearest indicator of a successful launch
- User retention: While the primary goal of a product launch is to generate interest in a new product or service, those new users must also be retained.
- Market share: As there are likely to be similar products on the market, it is important to measure the market share of new products to see how it is performing in comparison to competitors.
- Internal feedback: Feedback from internal audiences such as executives, sales reps, marketers, and product managers are important for measuring how well the launch met their objectives.
- External feedback: Feedback from customers is vital for gaining insight into the success of launch elements, such as channels and positioning. External feedback is vital for discovering areas for improvement to maintain momentum after the launch.
It’s Time to Out-Perform
Although competitive market analysis could prove advantageous during a product launch, it’s not an easy process and often requires the assistance of market research experts to do it right. As a market research services provider for over a decade, Research Optimus (ROP) has an experienced team of analysts assisting businesses in aligning their product launch strategy through competitor analysis and competitive landscape reports. Adhering to ISO quality process, ROP ensures that the data you receive is of the highest quality and yields the best possible outcome for your business. Contact us today to have a free consultation with one of our experienced analysts and learn more about our engagement models as well as pricing.